Reference no: EM132606177
Question - Capital Investment Analysis2. Data for three projects under review follow:
Project Year 0 Year 1 Year 2 Year 3 Year 4
A -$5,000 $1,000 $1,000 $3,000 -
B -$1,000 - $1,000 $2,000 $3,000
C -$5,000 $1,000 $1,000 $3,000 $5,000
(a) What is the payback period on each of the following projects?
(b) Which of the above project(s) is/are acceptable if the stipulated acceptable payback period is 2 years?
(c) Assuming the opportunity cost of capital is 10%, which of the above project(s) is acceptable under the NPV method?